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| I was just graduating from college early, I had enough credits and my father was not going to be able to put a crop in that spring due to illness. Was going to put the crop in and probably go into the Marines. I never left the farm but have witnessed a lot of ups and downs in those 45 years, plus the time in junior high and high school farming with Dad. Two bottom plows to onland seven bottom plows and now seven shank rippers behind 500HP tractors. One thing is always constant, and that is that land has almost always been a good investment. The second constant is that it is rare that a farm pays for itself at the get go without sacrifice someplace else. The third thing is that timing is everything. My Dad wasn't Rockefeller or anything, and lived thinking medical bills would maybe wipe him out but he did want me to get ahead and was willing to loan me the little bit of money he did have to put down on a local farm, and use the MN beginning farm program to have cheap...maybe 6% interest at the time after the state buydown, and go from a quarter section to farming his farm plus paying for another quarter section. I looked at the numbers and said....No. The price was $2100 per acre, the farm was both wet and sandy and you could hardly plow a straight furrow anywhere on it (just like Dad's farm) and it would break me. I knew that. I decided to do the best job I could on what I was share renting from Dad, and later from Mom, work off the farm, buy some equipment to make it easier to be a part time farmer, and be happy with the life I had. It is amazing how cheap you can live when you are young and single, when you eat a spartan diet, when you drive an old car, etc. Not recommending this, just pointing it out. So I tiled out the farm with my off farm income, leveled some hills with sweat equity, bought a 120HP diesel tractor with new tires already on it, bought a six row JD 7000 maximerge with dry fertilizer and plumbed it to spray herbicides so I could do three operations in one pass with saddle tanks on the 856 IH. I remember coming home and farming in the dark with those lights that hardly light up anything. Damn, halogen lights are great now when you get older!
So you know what happened, right? The 80s....the big crash. $3000 an acre farms went to $1000 and less. I started buying, and have bought the dips ever since. One formula that seems to work is that land should trade at five times the gross value of a crop of corn. Do the math, and you will see that anytime that happens, it is a good time to buy. Land dipped to $7000 in 2016 and no one wanted to step up and buy, and I did. Just like I did at $800, $1500, $2500, and $3000. I helped my oldest son buy a farm at $11500 last year and the math doesn't look that good right now, but I bet in ten years that one looks good, too. Don't despair, be happy with what you have, do the best job you can with what you have, and bloom where you are planted. It is a sin to envy (I have been guilty of that a LOT) and the ten commandments are not suggestions. Be prepared, and when opportunity comes, grab the brass ring and run with it. | |
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10 years from now
